SIXTEENTH SUPPLEMENTAL INDENTURE OF TRUST. Dated as of December 1, 2014 BETWEEN SOUTH DAKOTA HEALTH AND EDUCATIONAL FACILITIES AUTHORITY AND

Transcription

1 Draft of 11/3//2014 SIXTEENTH SUPPLEMENTAL INDENTURE OF TRUST Dated as of December 1, 2014 BETWEEN SOUTH DAKOTA HEALTH AND EDUCATIONAL FACILITIES AUTHORITY AND THE FIRST NATIONAL BANK IN SIOUX FALLS As Trustee Supplementing an Indenture of Trust dated as of August 1, 1988 as heretofore supplemented and amended and creating: South Dakota Health and Educational Facilities Authority $XXXXX Vocational Education Program Refunding Revenue Bonds, Series 2014B This instrument was prepared by: Bruce A. Bonjour Perkins Coie LLP 131 South Dearborn Chicago, Illinois 60603

2 TABLE OF CONTENTS Page GRANTING CLAUSES... 8 ARTICLE I P Definitions Section 1.01 P Definitions in Original Indenture Section 1.02 P Additional Definitions ARTICLE II P The Series 2014B Bonds Section 2.01 P Authorized Amount of Series 2014B Bonds Section 2.02 P Issuance of Series 2014B Bonds Section 2.03 P Form of Bond Section 2.04 P Amendment to Section 2.16 of the Original Indenture Section 2.05 P Principal Amount Limitation on Bonds Pursuant to Section 77 of the Issuer s Act ARTICLE III P Application of Bond Proceeds and Other Moneys Section 3.01 P Deposit of Series 2014B Bond Proceeds ARTICLE IV P Revenues and Funds Section 4.01 P Creation of Funds Section 4.02 P Use of Moneys in the Cost of Issuance Fund Section 4.03 P Debt Service Reserve Account, Series 2014B Section 4.04 P Application of any Unused Moneys ARTICLE V P Redemption of Series 2014B Bonds Before Maturity Section 5.01 P Redemption Dates and Prices ARTICLE VI P Tax Covenants Section 6.01 P Trustee and Issuer Not To Impair Tax Status of Bonds ARTICLE VII P Miscellaneous Provisions Section 7.01 P Statutory Facilities Fund; Amendments to Original Indenture and Pledge Agreement Section 7.02 P Arbitrage Section 7.03 P Investments Section 7.04 P Ratification Section 7.05 P Consent to Amendments Section 7.06 P Counterparts i-

3 TABLE OF CONTENTS (continued) Page Section 7.07 P Applicable Law Section 7.08 P Immunity of Officers and Members of the Issuer EXHIBIT A Refunded Projects A-1 -ii-

4 THIS SIXTEENTH SUPPLEMENTAL INDENTURE OF TRUST, dated as of December 1, 2014, the SOUTH DAKOTA HEALTH AND EDUCATIONAL FACILITIES AUTHORITY, constituted as an authority to act on behalf of the State of South Dakota and created by virtue of the laws of the State (together with any legal successor thereto, herein referred to as the Issuer ), and THE FIRST NATIONAL BANK IN SIOUX FALLS, a national banking association, as trustee (the Trustee ), W I T N E S S E T H : WHEREAS, the Issuer is duly organized pursuant to the provisions of the Chapter 1-16A of the South Dakota Codified Laws, as amended ( Issuer s Act ); and WHEREAS, the Issuer is authorized pursuant to the Issuer s Act to issue revenue bonds and acquire vocational education facilities to be leased to and purchased by the State Board of Education (the Board ) and/or certain Participating Institutions (herein defined); and WHEREAS, to secure the Bonds of the Issuer issued for such purposes, the Issuer s Act authorizes the Issuer to pledge payments to be made to the Issuer pursuant to lease or leases; and WHEREAS, Title 13 of the South Dakota Codified Laws provides that to secure lease purchase rentals payable by Participating Institutions and the Board to the Issuer the Board may pledge certain amounts of tuition and other student fees required to be paid to the Treasurer and deposited into the Tuition Subaccount; and WHEREAS, the Issuer and the Board have heretofore entered into a Lease Purchase Agreement dated as of August 1, 1988 as supplemented by various Supplements through and including a Sixteenth Supplement to Lease Purchase Agreement dated as of February 1, 2012 (collectively, as so supplemented the Lease ) pursuant to which the Board is leasing with an option to purchase certain facilities the acquisition and/or improvement and equipping of which was financed or refinanced in part or in whole with the proceeds derived from the issuance and sale by the Issuer of its Vocational Education Program Revenue Bonds, Series 1988 in the original principal amount of $11,120,000 (the Series 1988 Bonds ), its Vocational Education Program Revenue Bonds, Series 1990 in the original principal amount of $1,315,000 (the Series 1990 Bonds ), its Vocational Education Program Revenue Bonds, Series 1992 in the original principal amount of $8,785,000 (the Series 1992 Bonds ), its Vocational Education Program Revenue Bonds, Series 1993 in the original principal amount of $9,780,000 (the Series 1993 Bonds ), its Vocational Education Program Revenue Bonds, Series 1997 in the original principal amount of $10,365,000 (the Series 1997 Bonds ), its Vocational Education Program Revenue Bonds, Series 1998A in the original principal amount of $4,705,000 (the Series 1998A Bonds ), its Vocational Education Program Revenue Bonds, Series 1999 in the original principal amount of $7,135,000 (the Series 1999 Bonds ), its Vocational Education Program Revenue Bonds, Series 2004 in the original principal amount of $6,265,000 (the Series 2004 Bonds ), its Vocational Education Program Revenue Bonds, Series 2007 in the original principal amount of $8,805,000 (the Series 2007 Bonds ), its Vocational Education Program Revenue Bonds, Series 2008 in the original principal amount of $19,465,000 (the Series 2008 Bonds ), its Vocational Education Program Revenue Bonds, Series 2010A and Series 2010B in the original principal amount of $23,590,000 (collectively, the Series 2010AB Bonds ) its Vocational Education 1

5 Program Revenue Bonds, Series 2010C in the original principal amount of $12,605,000 (the Series 2010C Bonds ), its Vocational Education Program Revenue Bonds, Series 2011A in the original principal amount of $20,140,000 (the Series 2011A Bonds ), its Vocational Education Program Revenue Bonds, Series 2012A in the original principal amount of $18,810,000 (the Series 2012A Bonds ), and its Vocational Education Program Revenue Bonds, Series 2014A in the original principal amount of $1,790,000 (the Series 2014A Bonds and, collectively with the Series 1988 Bonds, Series 1990 Bonds, Series 1992 Bonds, Series 1993 Bonds, Series 1997 Bonds, Series 1998A Bonds, Series 1999 Bonds, Series 2004 Bonds, Series 2007 Bonds, Series 2008 Bonds, Series 2010AB Bonds, Series 2010C Bonds, Series 2011A Bonds, Series 2012A Bonds, the Series 2014B Bonds provided for herein, and any parity bonds issued in the future, the Bonds ); and WHEREAS, the Issuer issued the Series 1988 Bonds pursuant to an Indenture of Trust dated as of August 1, 1988 (the Original Indenture ) between the Issuer and The First National Bank in Sioux Falls, as Trustee (the Trustee ). The Issuer issued the Series 1990 Bonds pursuant to the Original Indenture as amended and supplemented by the First Supplemental Indenture of Trust dated as of May 1, 1990 between the Issuer and the Trustee (the First Supplemental Indenture ). The Issuer issued the Series 1992 Bonds pursuant to the Original Indenture as amended and supplemented by the Second Supplemental Indenture of Trust dated as of December 15, 1992 between the Issuer and the Trustee (the Second Supplemental Indenture ). The Issuer issued the Series 1993A Bonds pursuant to the Original Indenture as amended and supplemented by the Third Supplemental Indenture of Trust dated as of August 1, 1993 between the Issuer and the Trustee (the Third Supplemental Indenture ). The Issuer issued the Series 1993B Bonds pursuant to the Original Indenture as amended and supplemented by the Fourth Supplemental Indenture of Trust dated as of August 1, 1993 between the Issuer and the Trustee (the Fourth Supplemental Indenture ). The Issuer issued the Series 1997 Bonds pursuant to the Original Indenture as amended by the Fifth Supplemental Indenture of Trust dated as of December 1, 1997 between the Issuer and the Trustee (the Fifth Supplemental Indenture ). The Issuer issued the Series 1998A Bonds pursuant to the Original Indenture as amended and supplemented by the Sixth Supplemental Indenture of Trust dated as of May 1, 1998 between the Issuer and the Trustee (the Sixth Supplemental Indenture ). The Issuer issued the Series 1999 Bonds pursuant to the Original Indenture as amended and supplemented by the Seventh Supplemental Indenture of Trust dated as of June 1, 1999 between the Issuer and the Trustee (the Seventh Supplemental Indenture ). The Issuer issued the Series 2004 Bonds pursuant to the Original Indenture as amended and supplemented by the Eighth Supplemental Indenture of Trust dated as of December 1, 2004 between the Issuer and the Trustee (the Eighth Supplemental Indenture ). The Issuer issued the Series 2007 Bonds pursuant to the Original Indenture as amended and supplemented by the Ninth Supplemental Indenture of Trust dated as of November 1, 2007 between the Issuer and the Trustee (the Ninth Supplemental Indenture ). The Issuer issued the Series 2008 Bonds pursuant to the Original Indenture as amended and supplemented by the Tenth Supplemental Indenture of Trust dated as of September 1, 2008 between the Issuer and the Trustee (the Tenth Supplemental Indenture ). The Issuer issued the Series 2010AB Bonds pursuant to the Original Indenture as amended and supplemented by the Eleventh Supplemental Indenture of Trust dated as of July 1, 2010 between the Issuer and the Trustee (the Eleventh Supplemental Indenture ), as subsequently modified by certain Omnibus Amendments dated as of May 1, 2011 (the Omnibus Amendments ). The Issuer issued the Series 2010C Bonds pursuant to the Original Indenture as amended and supplemented by the 2

6 Twelfth Supplemental Indenture of Trust dated as of November 1, 2010 between the Issuer and the Trustee (the Twelfth Supplemental Indenture ). The Issuer issued the Series 2011A Bonds pursuant to the Original Indenture as amended and supplemented by the Thirteenth Supplemental Indenture of Trust dated as of August 1, 2011 between the Issuer and the Trustee (the Thirteenth Supplemental Indenture ). The Authority issued the Series 2012A Bonds pursuant to the Original Indenture as amended and supplemented by the Fourteenth Supplemental Indenture of Trust dated as of August 1, 2012 between the Authority and the Trustee (the Fourteenth Supplemental Indenture ). The Authority issued the Series 2014A Bonds pursuant to the Original Indenture as amended and supplemented by the Fifteenth Supplemental Indenture of Trust dated as of June 1, 2014 between the Authority and the Trustee (the Fifteenth Supplemental Indenture ); and WHEREAS, the Issuer applied the proceeds from the sale of the Series 1988 Bonds pursuant to a Lease Purchase Agreement dated August 1, 1988 as supplemented by the First Supplement to Lease Purchase Agreement (Watertown) dated as of August 1, 1989 and the First Supplement to Lease Purchase Agreement (Mitchell) dated as of March 1, 1990 (collectively, the Original Lease ) between the Issuer and the State Board of Education (the Board ); and WHEREAS, the Issuer applied the proceeds from the sale of the Series 1990 Bonds pursuant to the Original Lease as amended and supplemented by a Second Supplement to Lease Purchase Agreement dated as of May 1, 1990 between the Issuer and the Board (the Second Supplement ); and WHEREAS, the Issuer and the Board entered into that certain Third Supplement to Lease Purchase Agreement dated as of October 1, 1991 (the Third Supplement ) to provide for certain administrative and procedural matters in connection with the Program; and WHEREAS, the Issuer applied the proceeds from the sale of the Series 1992 Bonds pursuant to the Original Lease as amended and supplemented by the First Supplement, the Second Supplement, the Third Supplement and the Fourth Supplement to Lease Purchase Agreement dated as of December 15, 1992, between the Issuer and the Board (the Fourth Supplement ); and WHEREAS, the Issuer applied the proceeds from the sale of the Series 1993A Bonds pursuant to a Fifth Supplement to Lease Purchase Agreement dated as of August 1, 1993 between the Issuer and the Board (the Fifth Supplement ); and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 1993B Bonds pursuant to a Sixth Supplement to Lease Purchase Agreement dated as of August 1, 1993 between the Issuer and the Board (the Sixth Supplement ) (i) to finance the Series 1993B Improvements; (ii) to fund a Debt Service Reserve Fund; (iii) to fund capitalized interest; and (iv) to pay costs of issuance and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 1997 Bonds pursuant to a Seventh Supplement to Lease Purchase Agreement dated as of December 1, 1997 between the Issuer and the Board (the Seventh Supplement ) (i) to finance the Series 1997 Improvements (as therein defined); (ii) to fund a Debt Service Reserve Fund; 3

7 (iii) to fund capitalized interest and/or finance certain capital expenditures of the State of South Dakota for public vocational educational purposes; and (iv) to pay costs of issuance and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 1998A Bonds pursuant to an Eighth Supplement to Lease Purchase Agreement dated as of May 1, 1998 between the Issuer and the Board (the Eighth Supplement ) (i) to refund in advance of their stated maturities all of the Outstanding Series 1988 Bonds as of May 1, 1998; (ii) to fund a Debt Service Reserve Fund; and (iii) to pay costs of issuance and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 1999 Bonds pursuant to a Ninth Supplement to Lease Purchase Agreement dated as of June 1, 1999 between the Issuer and the Board (the Ninth Supplement ) (i) to finance a portion of the costs for new Projects for (A) the Southeast Technical Institute and (B) the Lake Area Technical Institute (collectively, the Series 1999 Projects ); (ii) to fund a Debt Service Reserve Fund; and (iii) to pay costs of issuance and other costs associated therewith (collectively, the Refunding Plan ); and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2004 Bonds pursuant to a Tenth Supplement to Lease Purchase Agreement dated as of December 1, 2004 between the Issuer and the Board (the Tenth Supplement ) (i) to refund on a current basis all of the Outstanding Series 1993 Bonds; (ii) to fund a required deposit to the Debt Service Reserve Fund; and (iii) to pay costs of issuance and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2007 Bonds pursuant to an Eleventh Supplement to Lease Purchase Agreement dated as of November 1, 2007 between the Issuer and the Board (the Eleventh Supplement ) to (i) currently refund the outstanding Authority s Vocational Education Program Refunding Revenue Bonds, Series 1997 (the Series 1997 Bonds ) for optional redemption at par on February 1, 2008, (ii) make a deposit to the general fund of the State of South Dakota in an amount not to exceed the capital expenditures to be made by the State in the next 12 months for public vocational education purposes (the Future Capital Expenditures ) and/or pay interest on the Series 2007 Bonds coming due within two years of the Issue Date, (iii) fund a deposit into the Debt Service Reserve Fund to secure the Bonds, (iv) pay a premium for a bond insurance policy to secure the Series 2008 Bonds, and (v) pay the costs of issuance of the Series 2007 Bonds; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2008 Bonds pursuant to a Twelfth Supplement to Lease Purchase Agreement dated as of September 1, 2008 between the Issuer and the Board (the Twelfth Supplement ) to (i) finance the Series 2008 Projects (as therein defined), (ii) fund a Debt Service Reserve Fund, (iii) fund capitalized interest on the Series 2008 Bonds, (iv) pay a premium for a bond insurance policy to secure the Series 2008 Bonds, and (v) pay the costs of issuance of the Series 2008 Bonds and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2010AB Bonds pursuant to a Thirteenth Supplement to Lease Purchase Agreement dated as of 4

8 July 1, 2010 between the Issuer and the Board (the Thirteenth Supplement ) to (i) finance the Series 2010 Projects (as therein defined), (ii) fund a Debt Service Reserve Fund, (iii) fund capitalized interest on the Series 2010AB Bonds, and (iv) pay the costs of issuance of the Series 2008 Bonds and other costs associated therewith; and WHEREAS, certain provisions of the Thirteenth Supplement were subsequently amended by the above-referenced Omnibus Amendments dated May 1, 2011; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2010C Bonds pursuant to a Fourteenth Supplement to Lease Purchase Agreement dated as of November 1, 2010 between the Issuer and the Board (the Fourteenth Supplement ) to (i) finance the Series 2010C Project (as therein defined), (ii) fund a Debt Service Reserve Fund, (iii) fund capitalized interest on the Series 2010C Bonds, and (iv) pay the costs of issuance of the Series 2010C Bonds and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2011A Bonds pursuant to a Fifteenth Supplement to Lease Purchase Agreement dated as of August 1, 2011 between the Issuer and the Board (the Fifteenth Supplement ) to (i) finance the Series 2011A Project (as therein defined), (ii) fund a Debt Service Reserve Fund, (iii) fund capitalized interest on the Series 2011A Bonds, and (iv) pay the costs of issuance of the Series 2011A Bonds and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2012A Bonds pursuant to a Sixteenth Supplement to Lease Purchase Agreement dated as of February 1, 2012 between the Issuer and the Board (the Sixteenth Supplement ) to (i) finance the Series 2012A Project (as therein defined), (ii) provide for a contribution to the State General Fund, (iii) refund the outstanding Series 1999 Bonds, and (iv) pay the costs of issuance of the Series 2012A Bonds and other costs associated therewith; and WHEREAS, the Issuer and the Board applied the proceeds from the sale of the Series 2014A Bonds pursuant to a Seventeenth Supplement to Lease Purchase Agreement dated as of June 1, 2014 between the Issuer and the Board (the Seventeenth Supplement ) to (i) refund on a current basis all of the outstanding Series 2004 Bonds, (ii) provide a Debt Service Reserve Fund with respect to the Series 2014A Bonds, (iii) provide for a contribution to the State General Fund, and (iv) pay the costs of issuance of the Series 2014A Bonds and other costs associated therewith; and WHEREAS, Section 3.07 of the Original Indenture authorizes the issuance of Additional Bonds (as defined therein) by the Issuer from time to time in accordance with the provisions thereof for various purposes, including (i) refunding any series of Outstanding Bonds, any maturity of any series of Outstanding Bonds or any Related Amount of Series Bonds within a series of Bonds by depositing with the Trustee, in trust for the sole benefit of such Bonds, noncallable Eligible Investments which will, together with the income or increment to accrue thereon without consideration of any reinvestment thereof, be sufficient to pay or redeem (when redeemable) and discharge the indebtedness of all Bonds to be refunded at or before their respective maturity dates; (ii) obtaining funds to make the required deposit to the Debt Service Reserve Fund; and (iii) obtaining funds for any other purpose permitted under the Act, provided 5

9 that any Facilities acquired within proceeds of such Additional Bonds shall become part of the Facilities and shall be subject to the Lease; and WHEREAS, among other power and authority, the Issuer has the power and authority to issue bonds to reduce the cash flow difficulties of public bodies, including school districts, to finance capital improvements and other expenses for vocational education, and to issue refunding bonds; and WHEREAS, section 1-16A-95 of the South Dakota Codified Laws provides that, beginning on July 1, 2013, the issuance of any additional bonds, notes, or other obligations of the Issuer which are payable out of receipts, rentals, and other payments made pursuant to lease purchase agreements with the Participating Institutions or the Board under the authority of chapter shall be approved by the South Dakota Legislature before issuance; provided, however, this requirement, does not apply to the issuance of bonds for the purposes of refinancing or refunding existing bonds, notes, or other obligation; WHEREAS, it has been proposed that the Issuer issue its Vocational Education Program Refunding Revenue Bonds, Series 2014B (the Series 2014B Bonds ) in the aggregate principal amount of $XXXXX as Additional Bonds pursuant to Section 3.07 of the Original Indenture and simultaneously apply the proceeds from the sale of such Series 2014B Bonds pursuant to a Supplement to Lease Purchase Agreement dated as of December 1, 2014 between the Issuer and the Board (the Eighteenth Supplement ) for the purposes of refinancing and refunding the Issuer s Series 2004 Bonds (the Refunded Bonds ), the accomplishment of which purposes includes paying the costs of issuance of the Series 2014B Bonds, providing a debt service reserve account with respect to the Series 2014B Bonds, and providing the General Fund of the State of South Dakota with an amount equal to the estimated present value savings on debt service with respect to the Refunded Bonds (the Refunding Savings Amount ); WHEREAS, the Issuer has determined that, under section 1-16A-95 of the South Dakota Codified Laws, because the Series 2014B Bonds are being issued for the purposes of refinancing or refunding existing bonds, notes, or other obligations of the Issuer, the approval of the South Dakota Legislature prior to the issuance of the Series 2014B is not required; WHEREAS, the Issuer proposes to enter into the Eighteenth Supplement with the Board for the purpose of amending the Original Lease as heretofore amended and supplemented to reflect the terms of the Series 2014B Bonds and the Projects financed or refinanced with the Refunded Bonds (the Refunded Projects ) and with respect to which the Board shall agree to pay supplemental Lease Rentals in amounts sufficient to pay debt service when due on the Series 2014B Bonds, subject to certain credits, limitations and other provisions as set forth in the Original Lease as supplemented by the First Supplement, the Second Supplement, the Third Supplement, the Fourth Supplement, the Fifth Supplement, the Sixth Supplement, the Seventh Supplement, the Eighth Supplement, the Ninth Supplement, the Tenth Supplement, the Eleventh Supplement, the Twelfth Supplement, the Thirteenth Supplement, the Fourteenth Supplement, the Omnibus Amendments, the Fifteenth Supplement, the Sixteenth Supplement, the Seventeenth Supplement, and the Eighteenth Supplement (collectively, the Lease ); and 6

10 WHEREAS, the execution and delivery of this Sixteenth Supplemental Indenture (the Sixteenth Supplemental Indenture ), and the issuance of the Series 2014B Bonds under the Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Omnibus Amendments, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, and the Fifteenth Supplemental Indenture have been duly approved by resolution adopted by the Issuer; and WHEREAS, all acts, conditions and things necessary to make this Sixteenth Supplemental Indenture a valid and enforceable agreement according to its terms, for the purposes herein expressed, have happened and have been done and performed, and the execution and delivery of this Sixteenth Supplemental Indenture have been in all respects duly authorized; and WHEREAS, all things necessary to make the Series 2014B Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the Issuer according to the import thereof, and to constitute this Indenture a valid assignment and pledge of the Program Revenues pledged to the payment of principal of and interest on the Series 2014B Bonds and a valid assignment of the rights of the Issuer in the Lease, and the creation, execution and delivery of this Sixteenth Supplemental Indenture, and the creation, execution and issuance of the Series 2014B Bonds, subject to the terms hereof, have in all respects been duly authorized. NOW, THEREFORE, THIS SIXTEENTH SUPPLEMENTAL INDENTURE OF TRUST WITNESSETH: That in order to secure the payment of the principal of and interest and premium, if any, on the Outstanding Bonds, the Series 2014B Bonds being issued hereunder and all Bonds hereafter issued and outstanding under the Indenture as the same may be further supplemented according to its tenor, purport and effect, and in order to secure the performance and observance of all the covenants and conditions of the Indenture and in said Bonds contained, and in order to declare the terms and conditions upon which the Series 2014B Bonds are issued, authenticated, delivered, secured and accepted by all persons who shall from time to time be or become holders thereof, and for and in consideration of the mutual covenants herein contained, of the acceptance by the Trustee of the trust hereby created, and of the purchase and acceptance of the Series 2014B Bonds by the purchasers thereof, the Issuer has executed and delivered this Sixteenth Supplemental Indenture, and by these presents does hereby convey, grant, assign, transfer, pledge, set over, confirm and grant a security interest in and unto the Trustee, its successor or successors and its or their assigns forever, with power of sale, all and singular, the property, real and personal, hereinafter described (said property being herein sometimes referred to as the trust estate, which is also to be deemed a portion of the trust estate under the Original Indenture, as now or hereafter supplemented) to wit: 7

11 GRANTING CLAUSES DIVISION I All right, title and interest of the Issuer in and to the Lease (including without limitation the Eighteenth Supplement), and all extensions and renewals of any of the terms of the Lease, including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt for all payments of Lease Rentals and other sums payable to or receivable by the Issuer under or due to its ownership of any interest in the Lease and all rights to bring actions and proceedings under the Lease for the enforcement thereof, and all right to do any and all things which the Issuer is or may become entitled to do under the Lease, which Lease has been recorded and filed in the offices of the Register of Deeds of Minnehaha, Codington, Davison and Pennington Counties, South Dakota; and DIVISION II All rights, title and interest of the Issuer in and to the Program Revenues, the Pledge Agreement and the Collection Agreement and any amounts payable thereunder, and any right, title or interest in or to the moneys on deposit in or receivable by the Tuition Subaccount; and DIVISION III All moneys and securities (including the investment income therefrom) and all other property of every kind and of every name and nature which are now or from time to time hereafter, by delivery or by writing of any kind, pledged, assigned or transferred as and for security hereunder to the Trustee by the Issuer or by anyone in its behalf, or with its written consent, and all cash and securities now or hereafter held in the funds, accounts or subaccounts created or established under this Indenture and all investment earnings thereon; and DIVISION IV Any and all other property of every kind and nature from time to time hereafter, by delivery or by writing of any kind, conveyed, pledged, assigned or transferred as and for additional security hereunder by the Issuer, the Board, the Treasurer, any Participating Institution or by anyone in their behalf to the Trustee, including, without limitation, funds of the Board or any Participating Institution held by the Trustee as security for the Bonds; EXCEPTED PROPERTY There is, however, expressly excepted and excluded from the lien of this Indenture amounts held by the Trustee which are required to be paid to the United States of America pursuant to Section 148 of the Code and it is the understanding of the Issuer and the Trustee that amounts held in the Capitalized Interest Fund are not pledged to secure the Bonds but may be applied directly or indirectly to either pay or reimburse the State of South Dakota for payment of interest on the Series 2014B Bonds. TO HAVE AND TO HOLD all and singular, the Trust Estate, whether now or hereafter owned, unto the Trustee as herein provided, its successors and assigns; provided, however, that 8

12 this Indenture is upon the express condition that if the Issuer shall pay or cause to be paid all indebtedness secured hereby and shall keep, perform and observe all and singular the covenants and promises in the Bonds kept, performed and observed by the Issuer, then this Sixteenth Supplemental Indenture and the rights hereby granted shall cease, determine and be void, otherwise to remain in full force and effect. AND IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future registered owners of the Bonds issued under and secured by the Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds or series thereof appertaining thereto over any of the other Bonds or series thereof except as otherwise expressly provided herein; PROVIDED, HOWEVER, that if the Issuer shall pay or cause to be paid, or there shall otherwise be paid or provision for payment made of, the principal of and interest on the Bonds due or to become due thereon, at the times and in the manner mentioned in the Bonds, and shall pay or cause to be paid to the Trustee all sums of money due or to become due according to the provisions hereof and shall otherwise comply with Article IX of the Original Indenture, then this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and effect. In connection with the foregoing transfer, pledge, grant and assignment, the Issuer does hereby deliver to, and deposit with, the Trustee for such purpose, and the Trustee hereby acknowledges receipt of the executed Lease, Pledge Agreement and Collection Agreement. The Trustee hereby acknowledges, approves and agrees to the terms, conditions, appointments and agencies of the Lease, Pledge Agreement, Collection Agreement and the Subleases as they relate to it and its participation in the transactions contemplated hereby and thereby. THIS SIXTEENTH SUPPLEMENTAL INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all said property, rights and interests, including, without limitation, the amounts hereby assigned and pledged, are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the Issuer has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners, from time to time, of the Bonds, or any part thereof, as follows: ARTICLE I P Definitions Section 1.01 P Definitions in Original Indenture. Words and terms which are defined in the Original Indenture, as heretofore supplemented, and the Lease shall have, when used herein, the same meanings ascribed to them therein, unless the context or use indicates a different meaning or intent or unless a different meaning is ascribed thereto herein. Section 1.02 P Additional Definitions. In addition to the words and terms elsewhere defined in this Sixteenth Supplemental Indenture, the following words and terms as used in this 9

13 Sixteenth Supplemental Indenture shall have the following meanings unless the context or use indicates another or different meaning or intent and the definitions of such terms, if any, set forth in the Original Indenture, are hereby amended to read as follows unless the context requires otherwise: Bond or Bonds means one or more of the Issuer s Outstanding Series 1998A Bonds, Series 1999 Bonds, Series 2004 Bonds, the Series 2007 Bonds, the Series 2008 Bonds, the Series 2010AB Bonds, the Series 2010C Bonds, the Series 2011A Bonds, the Series 2014B Bonds, or any other Outstanding Bonds issued under the provisions of the Indenture on a parity with the Series 1998A Bonds, the Series 1999 Bonds, the Series 2004 Bonds, the Series 2007 Bonds, the Series 2008 Bonds, the Series 2010AB Bonds, the Series 2010C Bonds, the Series 2011A Bonds, the Series 2012A Bonds, the Series 2014A Bonds, and the Series 2014B Bonds, including any Additional Bonds. Bond. Bondholder, holder, or owner of the Bonds means the registered owner of any Bond Register means the registration books of the Issuer kept by the Trustee to evidence the registration and transfer of Bonds. Code means the Internal Revenue Code of 1986, as amended. Cost of Issuance Fund means the fund created by Section 4.01O hereof. Escrow Account means the account established under the Escrow Agreement and held by the Escrow Agent, consisting of money and securities that will be used to refund the Refunded Bonds on August 1, Escrow Agent means The First National Bank in Sioux Falls, as Escrow Agent under the Escrow Agreement. Escrow Agreement means the Escrow Agreement dated as of December 1, 2014 with respect to the Refunded Bonds between the Authority and The First National Bank in Sioux Falls. Indenture means the Original Indenture as amended and supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Omnibus Amendments, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, and this Sixteenth Supplemental Indenture, and as it may from time to time be further supplemented and amended. 10

14 Lease means the Original Lease as amended and supplemented by the First Supplement, the Second Supplement, the Third Supplement, the Fourth Supplement, the Fifth Supplement, the Sixth Supplement, the Seventh Supplement, the Eighth Supplement, the Ninth Supplement, the Tenth Supplement, the Twelfth Supplement, the Thirteenth Supplement, the Fourteenth Supplement, the Omnibus Amendments, the Fifteenth Supplement, the Sixteenth Supplement, the Seventeenth Supplement, and the Eighteenth Supplement, and as it may from time to time be further supplemented and amended. Mitchell Project means the Refunded Project subleased to Mitchell School District No pursuant to the Mitchell Sublease. Mitchell Sublease means that certain Sublease Agreement dated as of August 1, 1988, between the Board and Mitchell School District No. 17-2, as amended and restated from time to time. Omnibus Amendments means the Omnibus Amendments dated as of May 1, 2011 and entered into by and among the Issuer, the Trustee, the Board, and certain Participating Institutions, effecting certain amendments to the Indenture and the Lease with respect to the Series 2010AB Bonds. Outstanding or Bonds outstanding means all Bonds which have been duly authenticated, and delivered by the Trustee under the Indenture, except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds for the payment or redemption of which cash or Government Securities have been deposited with the Trustee in such amount as the Trustee shall determine will, either alone or together with the income or increment to accrue thereon without consideration of any reinvestment thereof, be fully sufficient to pay or redeem (when redeemable) and discharge the indebtedness on such Bonds at or before their respective maturity dates; provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given or arrangements satisfactory to the Trustee have been made therefore, or waiver of such notice satisfactory in form to the Trustee, shall have been filed with the Trustee; and (c) Bonds in lieu of which others have been authenticated under the Indenture. Person means any natural person, firm, joint venture, association, partnership, business trust, corporation, public body, agency or political subdivision thereof or any other similar entity. Rebate Fund means the Rebate Fund established and created by Section 4.09 of the Original Indenture. Record Date means the 15th day (whether or not a business day) of the calendar month next preceding the month in which an interest payment on any series of Bonds is to be made; provided, however, if the Issuer shall default in the payment of interest, the Record Date shall be determined as provided in the Series 2014B Bonds. 11

15 Refunded Bonds has the meaning given thereto in the Preamble. Refunded Projects has the meaning given thereto in the Preamble, and such term is further described in attached Exhibit A. Series 2014B Bonds means the $XXXXX aggregate principal amount of Vocational Education Program Refunding Revenue Bonds, Series 2014B of the Issuer authorized to be issued by the Issuer pursuant to the terms and conditions of Section 3.07 of the Original Indenture and Article II P hereof. Statutory Facilities Fund means the fund created under section of the South Dakota Codified Laws and currently designated in such section as the Postsecondary Technical Institutes Facilities Fund. Tax Exemption Certificate means the Tax Regulatory Agreement of the Issuer and the Trustee, delivered at the time of the issuance of the Series 2014B Bonds. Watertown Project means the Refunded Project subleased to Watertown School District No pursuant to the Watertown Sublease. Watertown Sublease means that certain Sublease Agreement dated as of August 1, 1988, between the Board and Watertown School District No. 14-4, as amended and restated from time to time. All references in this instrument to designated Articles, Sections and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed, of the Original Indenture as originally executed or as supplemented, as the case may be. The words herein, or hereof and hereunder and other words of similar import wherever used in the Indenture refer to the Indenture, the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Omnibus Amendments, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, and this Sixteenth Supplemental Indenture, as the case may be, as a whole and not to any particular Article, Section, or other subdivisions thereof unless the context indicates otherwise. The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles. 12

16 ARTICLE II P The Series 2014B Bonds Section 2.01 P Authorized Amount of Series 2014B Bonds. No Bonds may be issued under the provisions of this Sixteenth Supplemental Indenture except in accordance with this Article. The total principal amount of Series 2014B Bonds that may be issued is hereby expressly limited to $XXXXX. Section 2.02 P Issuance of Series 2014B Bonds. The Series 2014B Bonds shall be designated $XXXXX Vocational Education Program Refunding Revenue Bonds, Series 2014B (the Series 2014B Bonds ). The Series 2014B Bonds shall be issuable as fully registered Bonds in the denomination of $5,000 or any integral multiple thereof. The Series 2014B Bonds shall each be lettered and numbered R-1 and upward. The Series 2014B Bonds, as initially issued, shall be dated as of the date of original issuance thereof. Except as described in the preceding sentence, subsequently issued Series 2014B Bonds will be dated as of the later of the date of original issuance thereof or the most recent preceding interest payment date to which interest has been paid thereon. Series 2014B Bonds issued on an interest payment date to which interest has been paid will be dated as of such date. Interest on the Series 2014B Bonds shall be payable on February 1 and August 1 of each year commencing February 1, Each Bond shall bear interest from the dated date thereof. The Series 2014B Bonds shall bear interest at the respective rates set forth below and shall mature on August 1 in the principal amounts in each of the years set forth below in the following schedule: Maturing August 1 Par Amount ($) Interest Coupon Price CUSIP V V V V V V V V The principal of, premium, if any, and interest on the Series 2014B Bonds shall be payable in any currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts, and such principal 13

17 and premium, if any, shall be payable at the principal corporate trust office of the Trustee, upon presentation of the Bonds. Payment of the interest on any Bonds shall be made to the person appearing on the Bond Register as the registered owner thereof as of the Record Date for such interest payment and shall be paid (i) by check or draft mailed to the registered owner at his address as it appears on such registration books or at such other address as is furnished the Trustee in writing by such owner not later than the Record Date for such interest payment or (ii) as to any registered owner of $1,000,000 or more in aggregate principal amount of Series 2014B Bonds who so elects, by wire transfers of funds to such wire transfer address within the continental United States as the registered owner shall have furnished in writing to the Trustee not later than the Record Date for such interest payment. Defaulted Interest with respect to any Bond ( Defaulted Interest ) shall cease to be payable to the owner of such Bond on the relevant Record Date and, except as hereinafter provided, shall be payable to the person in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Board shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof) and, at the same time, the Board shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the owners of the Bonds entitled to such Defaulted Interest as provided in this Section. Following receipt of such funds the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Board of such Special Record Date and, in the name and at the expense of the Board, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, not less than 10 days prior to such Special Record Date to each owner of a Bond of such series at the address of such owner as it appears on the Bond Register. Such Defaulted Interest shall be paid to the owners in whose names the Bonds on which such Defaulted Interest is to be paid are registered on such Special Record Date. The Series 2014B Bonds maturing on August 1 in 2038 shall be redeemed prior to maturity at the par value thereof plus accrued interest to the date fixed for redemption (the Bonds to be redeemed to be selected by lot in authorized denominations in such manner as shall be determined by the Trustee), on the first day of August in 2030 and on the first day of each August thereafter in the Sinking Fund Installment amounts and in the years set forth below: Series 2014B Bonds Due August 1, 2038 Sinking Fund Year Installments 2030 $

18 * Final Maturity * The Series 2014B Bonds are subject to redemption prior to maturity on or after August 1, 2024, at the option of the Issuer or upon direction of the Board out of amounts prepaid by the Board on the Lease and deposited in the Debt Service Fund, in whole or in part on any date, either (a) in the inverse order of maturity (less than all of a single maturity of such Series 2014B Bonds to be selected by lot in such manner as may be designated by the Trustee), or (b) on a reasonably proportionate basis for each maturity, such basis to be determined as nearly as practicable by the Trustee with respect to each outstanding maturity of the Series 2014B Bonds by multiplying the amount then available to redeem such Series 2014B Bonds, less the amount required to pay the accrued interest thereon, by the ratio by which (i) the principal amount of the Outstanding Bonds of each such maturity (for such Series) bears to (ii) the aggregate principal amount of all Outstanding Bonds for all maturities for such Series in each case at the redemption price of par plus accrued interest to the redemption date; provided, however, notice to the holders of the Bonds to be redeemed shall not be given by the Trustee unless the Trustee determines that sufficient funds shall be on deposit to pay the redemption price in full on the date set for redemption. In all other respects the Series 2014B Bonds are redeemable upon the notice and in the manner provided in Sections 2.12 and 2.13 of the Original Indenture for fully registered Bonds and with the effect provided in said Section. Section 2.03 P Form of Bond. The Series 2014B Bonds of each series and the Trustee s certificate of authentication to be endorsed thereon shall be in substantially the following form, with necessary and appropriate variations, omissions and insertions as permitted or required by the Indenture, to wit: 15

19 (FORM OF REGISTERED BOND) No. R- $ UNITED STATES OF AMERICA SOUTH DAKOTA HEALTH AND EDUCATIONAL FACILITIES AUTHORITY VOCATIONAL EDUCATION PROGRAM REFUNDING REVENUE BONDS, SERIES 2014B Interest Maturity Date Dated CUSIP % August 1, 20 December, REGISTERED OWNER: CEDE & Co. PRINCIPAL AMOUNT: The South Dakota Health and Educational Facilities Authority constituted as an authority to act on behalf of the State of South Dakota and created by virtue of the laws of the State (together with any legal successor thereto, herein referred to as the Authority ), for value received, promises to pay, but only from the Lease Rentals and other Program Revenues (herein defined) and any amounts on deposit in the Debt Service Reserve Fund referred to herein, to the above Registered Owner or registered assigns, upon presentation and surrender of this Bond, the above Principal Amount on the above Maturity Date and to pay interest on said sum from the dated date hereof at the rate of interest per annum set forth above, payable semiannually on February 1 and August 1, of each year, commencing February 1, 2015, and at maturity, subject in all events to the provisions hereof respecting redemption before maturity. Principal of this Bond is payable, upon presentation and surrender, at the principal corporate trust office of The First National Bank in Sioux Falls, located in Sioux Falls, South Dakota, or any successor trustee appointed and acting under the indenture (the Trustee ) or paying agent appointed for such purpose pursuant to the Indenture, and except as otherwise provided herein, the semi-annual interest hereon shall be paid by check or draft mailed to the registered owner hereof at the address of the registered owner shown on the registration books of the Authority to be kept by the Trustee at the close of business on the record date, which is the fifteenth day (whether or not a business day) of the calendar month next preceding the month in which an Interest Payment Date occurs, unless the Authority shall default in the payment of interest due on such payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by or on behalf of the Authority to the registered owners of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the person in whose name the Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing. Interest on this Bond 16

20 shall also be payable by wire transfer to any registered owner of Bonds in the aggregate principal amount of $1,000,000 or more at the written request of the owner specifying the owner s account at a bank located in the continental United States. The Bonds issued prior to February 1, 2015, shall be dated as of December, Bonds issued on and after February 1, 2015 shall be dated as of the February 1 or August 1 next preceding their date of issue or, if issued on a February 1 or August 1, as of such date, provided that if payment of interest on the Bonds shall be in default, Bonds issued in exchange for Bonds surrendered for transfer or exchange shall be dated as of the date to which interest has been paid in full on the Bonds surrendered. Each payment will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been signed by the Trustee. This Bond is one of an authorized series of Bonds (the Series 2014B Bonds ) issued for the purposes of refunding or refinancing existing bonds of the Issuer. This Bond is issued under and secured by a certain Indenture of Trust dated as of August 1, 1988 (the Original Indenture ) between the South Dakota Health and Educational Facilities Authority (the Authority ) and The First National Bank in Sioux Falls, as Trustee (together with any successor Trustee, the Trustee ), as supplemented from time to time by various supplemental indentures of trust (collectively, Supplemental Indentures ) and most recently supplemented by that certain Sixteenth Supplemental Indenture of Trust dated as of December 1, 2014 (the Sixteenth Supplemental Indenture ), each between the Authority and the Trustee. The Original Indenture, as supplemented from time to time is referred to herein as the Indenture. The Authority has previously issued its Series 1988 Bonds, Series 1990 Bonds, Series 1992 Bonds, Series 1993 Bonds, Series 1997 Bonds, Series 1998A Bonds, Series 1999 Bonds, Series 2004 Bonds, Series 2007 Bonds, Series 2008 Bonds, Series 2010A Bonds, Series 2010B Bonds, Series 2010C Bonds, Series 2011A Bonds, Series 2012A Bonds, and Series 2014A Bonds, which, to the extent Outstanding as of the date hereof, are secured on a parity with the Series 2014B Bonds and any Additional Bonds issued under the Indenture (the Bonds ). The Improvements which have been financed or refinanced with the proceeds of the Series 1988 Bonds, the Series 1990 Bonds, the Series 1992 Bonds, the Series 1993 Bonds, the Series 1997 Bonds, the Series 1998A Bonds, the Series 1999 Bonds, the Series 2004 Bonds, the Series 2007 Bonds, the Series 2008 Bonds, the Series 2010A Bonds, the Series 2010B Bonds, the Series 2010C Bonds, the Series 2011A Bonds, the Series 2012A Bonds, the Series 2014A Bonds, and the Series 2014B Bonds have been leased by the Authority to the Board of Education of the State of South Dakota (the Board ) pursuant to a Lease Purchase Agreement dated as of August 1, 1988 (the Original Lease ) as supplemented most recently by an Eighteenth Supplement to Lease Purchase Agreement dated as of December 1, 2014 (the Eighteenth Supplement ). The Original Lease, as supplemented from time to time by the Supplemental Leases, is referred to herein as the Lease. The lease purchase rentals payable under the Lease (the Lease Rentals ) are established in an amount sufficient to pay the principal of, interest and 17